The pawn shop, redesigned as a credit card. Pledge what you own, build credit, and keep the heirloom in your pocket.
The card that started a quiet fight with an industry that has been around since antiquity. Notice it doesn't ask for your credit score.
Somewhere right now, a person is standing at a pawn counter, sliding a wedding ring across the glass and accepting cash that comes with a catch: a triple-digit interest rate and a ticking clock. If they miss a payment, the ring is gone. This is one of the oldest financial transactions on earth, and it has barely changed.
Pesto built the alternative. Instead of selling your valuables for cash, you send Pesto your assets - gold, jewelry, a watch - and receive a credit card with a limit based on what they are worth. No minimum credit score. You keep the line of credit, you build a payment history, and the asset is collateral, not a casualty. It is, in the company's framing, liquidity without the liquidation.
The product has a name that sounds friendlier than the industry it is challenging: the Pesto Mastercard. It runs on familiar rails - issued by Continental Bank, carried on the Mastercard network - which is exactly the point. The radical part is hidden in plain sight.
The numbers are not subtle. In 2019, the U.S. pawn market pulled in roughly $9.2 billion in interest revenue. More than 6 million underbanked Americans lean on high-interest loans where average rates can climb past 120%. These are not fringe products. For people locked out of mainstream credit, the pawn shop and the payday lender are the system.
The cruelty of it is mechanical. To raise a few hundred dollars, you hand over something worth far more, then pay to get it back - if you can. The asset does all the work, and the borrower takes all the risk. The credit score, the one thing that might eventually get them a fairer deal, never moves.
That gap - real wealth, no access - is the tension Pesto was built around. Everything the company does traces back to it.
James Savoldelli did not study this market from a distance. Before founding Pesto, he went and worked inside a pawn shop, watching the same transaction repeat with different faces. The lesson was not that the customers were reckless. It was that they had assets and no good way to borrow against them without losing everything.
So the bet was specific. If the collateral is what makes a pawn loan safe for the lender, why not keep the collateral and pass the savings to the borrower as lower rates and a real credit-building product? Same security, better deal, a path forward instead of a revolving door. Investors agreed: in May 2023, Pesto closed an $11 million round and put the card on the market.
It is a tidy piece of logic, the kind that sounds obvious only after someone has built it. The hard part was wrapping a centuries-old practice in a Mastercard and a banking partner without losing what made it work.
James Savoldelli starts Pesto in San Francisco after studying financial inclusion and working inside the pawn industry firsthand.
The team designs an asset-backed credit product - collateral in, credit line out - and lines up a bank partner to issue it.
Pesto announces an $11M round and debuts the Pesto Mastercard, issued by Continental Bank, with early focus on Atlanta and Los Angeles.
A small team backed by Y Combinator and Activant works to turn a one-off transaction into an on-ramp to mainstream credit.
Strip away the branding and it is three steps. You pledge an asset. Pesto values it and opens a credit line. You spend, repay, and your payment history starts to count - the way it would for anyone with a traditional card.
Submit eligible valuables - gold, jewelry, watches - for appraisal. No minimum credit score required to qualify.
Receive a Pesto Mastercard with a limit set by your collateral's value. Spend anywhere Mastercard is accepted.
Make payments, build history, and work toward unsecured products - all while your valuables stay yours.
The central claim is about price. Pesto says its rates often run a fraction of pawn alternatives - up to 90% lower on equivalent loans. Put the typical figures side by side and the gap is the whole pitch.
Directional, based on Pesto's public statements and cited market rates. Actual terms vary by borrower and asset.
The other proof is who showed up to fund it. Pesto's round drew a notably deep bench for an early-stage consumer lender.
And the issuing partner matters. Continental Bank's CEO Nathan Morgan has publicly backed the goal of making lending more affordable, safe and accessible - the kind of sentence a regulated bank does not attach to its name lightly.
It would be easy to dress this up as a movement. Pesto mostly doesn't. The mission is plain: give underbanked Americans an affordable, dignified alternative to the loans that quietly drain them, and use the assets they already own as the bridge to mainstream credit.
A pawn shop asks: how much can I lend you for this? Pesto asks: how do we get you to the point where you don't need us anymore? Those are different businesses, even if they start with the same ring on the same counter.
Whether that scales is the open question. The company is small - a lean team of roughly nine - and the market it is taking on is large, entrenched, and very comfortable. But the wedge is sharp, and the math, at least on paper, favors the borrower for once.
Picture that person again, the one with the wedding ring and the bad set of options. In Pesto's version of the scene, they still pledge the ring. But they don't sell it, and they don't pay 120% to get it back. They get a card, a credit line, and a payment history that means something to the next lender they meet.
The transaction that hasn't changed in centuries finally does - not with a grand gesture, but with a card in a wallet and a score that starts to move. That is the whole bet. Keep the asset. Build the credit. Walk out with more than you came in with.